Topic: I am NOT 100% Convinced Bitcoin Is Money... (Read 2959 times)

OP,

Everyone has a differing definition of MONEY.

Simply put: Your definition may not line up with others. So don't try so hard to understand. Just keep your definition and accept that others are different.

I am willing to entertain that idea. It still parallels fiat more than gold.

Or perhaps, Bitcoin is not compatible to gold, or fiat, because Bitcoin is a new class of its own. Really it isn't as it does not work in any way like the currencies preceded it beyond the analogs of physical gold mining built into it and the ability to spend it for goods and services as a bartering medium.

Barter>Metal>Fiat>Crypto

I have to take issue with this. The 'standard' definition of money has been Aristotle's for more generations than the very concept of fiat.  To whit
Gold meets all of that. Little else does, bit coin included. It misses on part 4, as despite its decentralized nature, it IS a fiat currency. A novel approach, but still...

Gold is not "money" in the usual meaning because it lacks certain essential and practical features. Bitcoins solves that (and more).

Otherwise you can also say: Dollars are bits on a bank's server. Are bits money? No. So Dollars are not money.

Anyway:
This.

For all of you who missed this, here's Erik's excellent article once again: http://evoorhees.blogspot.com/2013/05/bitcoin-2013-role-of-bitcoin-as-money.html?m=1 ← Read this!

  I do believe in a better tomorrow, and pushing through the coming pain to get there for our combined futures. My generation is out of gas, it's time to step up and right this wrong after 100 years of money generated misery.

Currently there is no bitcoin bank to speak of, so bitcoin loans are person to person, and can not be hypothacated. In other words if I have 2 BTC to loan, I can't make loans on 10BTC. This would be fraud unless you are a part of the central banks, then it is regular business. Can anybody say legalized theft...

Bitcoin as a store of value...Today yes I put a value to it. As for the future it is too early to tell. The central banks (and Governments) will try to kill it as bitcoin as a trade facilitator threatens their power, and gives that power to bitcoin users.

Currency, whether bitcoin, seashells, or cash, used as a medium of exchange, is Money.

Operatr, you are an idealist. I know my tribe 

Sounds like Bitcoin could be a valuable teaching tool there  

This is the true power of BTC as a currency. As system where all of the money must be made accountable. If a loan is made in BTC, it is made with actual currency and not air. It is still the transfer of wealth from one person to another, just like loaning out some amount of physical gold or loaning cash to a friend to be paid back.

A "loan" now is just the creation of more debt overall and is based on nothing as a future liability for the bank. Technically the bank didn't actually loan you anything at all but some run time on Bernake's Magic Money Machine.

If the world operated on a free market system that cannot be corrupted by endless printing of money, that means our government would have to be accountable for their spending because they can't just spend their way out of it (which never works obviously). It means that the rich and powerful only stay that way if society allows it. Imagine a government that only functions financially at the will of the public, since they can never tax us by force. If they want to go to war it would only happen through willful public spending. Their salaries are only as big as we allow them to be, as the menial government jobs they should be. Obviously there are some hypotheticals in there, but overall a BTC conversion would create accountability unseen at any point in US history, or world history for that matter.

Reminds me of my six year old, who said that he wanted to invent a system that involved taking a picture of you holding money "to prove that you had it" in order to buy something.  He was upset because he wanted to buy a game but didn't have a credit card.  We later had to get him to think about why his invention wouldn't quite work the way that he thought it would.  He wouldn't need his invention with BTC though.

How bitcoin is valued will be market based. If you live in the USA, its going to be valued in dollars. If you are using bitcoin in the jungles of South America, it may be valued in coconuts. There will always be a need for some kind of exchange. Weather that is a currency exchange or a commodity exchange does not matter. Ultimately the user will have to be able to use bitcoin as easily as they are using their own countries currency. Businesses will also have to easily exchange bitcoin for what ever medium their suppliers use. It would be nice if everyone would accept bitcoin, and forgo any exchange. Exchanges are an inefficient way to move money. But until I can call up my supplier in China, and do business in bitcoin, I will have to use something that is acceptable for all parties.

Large companies use to have their own banking system, called the payroll department. With large sums of currency, or gold/silver. This is going to be needed again, as bitcoins need to work outside of the current central banking system. Companies will have to be able to maintain a store of bitcoin for this to work.

I would argue further that it's counterfeit, as it's initial run was supposed to be backed in gold (read the earlier "legal tender" clauses) and then, by using the frog boiling method, it was stripped of all backing.

Fiat money is just metal and linen with no intrinsic value on their own. It is only worth something because we say it is worth something. Fiat might as well be seashells or leaves, as Bernake and his international banker cronies can just keep making more endlessly.

I'm not 100% convinced the Dollar is money.

Bernanke says that inflation is less than 2%. Yet the cost of my staple foods have nearly doubled in two years. As I live on the edge of homelessness at all times, that level of inaccuracy is NOT useful in any way. Besides, Bernanke is a weak kneed toad. If the Fed is to regain any credibility they need another Volker, or at least a Greenspan. If you are going to play crazy games with the economy, you should be an INTELLIGENT traitor. Not just an academic follower.

Mithril = cryptography (impervious to violence)
Dwarves = cypherpunks or software developers (tinkerers who constantly build tools searching for market solutions)
Durin's Bane = the Free Market (ability to perform economic calculation without regulatory censorship enforced through violence)

http://www.forbes.com/sites/afontevecchia/2011/07/13/bernanke-fights-ron-paul-in-congress-golds-not-money/


Bernanke says it is not money so it is not money 

Its the same thing weve being doing ages. Trading one thing of percieved value for another thing of percieved value.

LOL!

And more seriously, we all know that nerds get their post high school revenge by accumulating a large amount of the gold...

gold is indeed money. Historically, that has been it's primary use. That it also has industrial uses is irrelevant.

That most countries no longer view it as money has a lot to do with deliberate disinformation by a group of talented liars and their less talented useful idiots. Prior to 1944, the whole world viewed gold as money. Prior to 1971, most of the world still did. In 1971 the link between fiat and gold was broken definitively, to allow for a free floating currency so that governments no longer had ANY restraint on their nefarious activities.

Bitcoin is more like Milton Friedman's idea of money (Peer to Peer coin even more so), where a computer or network controls the rate of inflation.

I think Bitcoin is useful and interesting, and yes, money. It is used as a medium of exchange beyond direct barter, it is portable, durable, and easily divisible without incurring total loss by division. It meets all the criteria except being a stable store of value, and frankly only precious metals have really stood up to that test. Even then, shakily. I think Bitcoin has the capability of doing so for the same reason: Scarcity. I suspect that it will be that most feared (by Keynesians) of monetary units, the deflationary model.

Deflation, contrary to Keynes, is generally a GOOD thing in a money. Sure, it makes prices go down over time, but that's not because the VALUE of goods goes down, it's because the value of the currency goes UP! So if the unit value changes upward, causing a decline in prices, this is good for all involved except accountants who tend to view things only from the POV of their books.

I am reminded yet again of the "useful idiots" who decried Ford paying their workers five dollars a week. They were arguing on imposing a minimum wage, and using a historical example completely out of context. So, here's the context. Ford was paying almost TWICE the going labor rate for skilled workers, and that payment was in a currency backed by gold. Specifically, they were being paid five dwt a week. Given today's price of gold, that equals out to 346.25 a week. And gold just took a hit vs. the dollar. At minimum wage, excluding tax (which in the time frame we're discussing didn't exist on such low incomes) you would make 290 a week right now. Since even at minimum wage the combined leeching is in the neighborhood of 15% (prior to refunds, if any) and Ford's workers paid AT WORST 1%, the comparison falls the hell apart. Gold deflated significantly vs. the dollar, now that it is free floating and inflationary. Yet it's PURCHASING ABILITY is about the same. A model T cost, at it's lowest, $300.00, or 15 oz. troy of gold. Today, that is $20,775. That will in fact buy you several different cars all significantly superiour to the Model T.

Fiat hasn't fared well against deflationary currency, and if you've been paying attention, the "owners" of the fiat (central banks and their pet politicians) have been investing quietly but heavily in gold. Why? Because they KNOW that the ponzi scheme known as Fiat currency inflation has to end, and that it ends badly for those who hold nothing else.

Where bitcoin will figure into all of this is hard to tell, but it's biggest uptick was in the wake of the central banks of Cypress, with the IMF's hearty approval, confiscating the accumulated fiat wealth of practically everyone on the island. From the time the writing was on the wall to the time the trigger was pulled, a lot of people bought bitcoins as an escape from the dirty trick. A lot of you on this forum benefited from that, but so did those Cyprians who managed to save a bit of their treasure. It certainly gained the bitcoin some legitimacy AS MONEY.

I think the cryptocurrency idea is a good one. Flawed in some ways, but all monetary systems are. By decentralizing the notes, you take away a lot of the ability to abuse it. By being deflationary, it's perceived value is likely to increase over time. It's not a good substitute for precious metals for long term valuation, but it's a good substitute for centralized fiat.

I have a lot more questions than answers at the moment, so I'll end this here for now.

in prison people trade cigarettes to ensure they dont get raped in the shower and to pay for extra food from other prisoners. in european countries alcohol is used to get friends to do you favours. such as helping you fix a car or paint a housewall. these are not money. these are currencies. money bears the trademarked symbols of the governments using it EG £ $.

so you are right bitcoin is not money. bitcoin is:
functionally: a currency(product used in trade)
physically: an asset(a possession holding value)

bitcoin (paper wallet) is not a payment system. it is just a bunch of letters and number and a promise that those letters and numbers can be redeemed for a value they represent.

much like the serial numbers and 'promise' on a bank note

the payment system (bitcoin client/miners) is not essential to bitcoins use. as there are many off the chain methods of moving bitcoin.

we need to get a trusted service to start a calculation based on how many coins are made per day (3600) divided by the number of miners, to get an average income per day/month/year value.

and then compare that to food, commodity values. much like governments compare cost of living vs minimum wage. then we will be free from the fiat controls. if we can easily see that bitcoin is worth X loaves of bread, milk grams of gold etc.

bitcoin is not a commodity but we do need to start pricing bitcoin against commodities instead of the fiat value of commodity